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UNI Global Union , reacting to the South Africa Appeal Court decision to order Walmart to double the supplier development fund to R240 million for its acquisition of Massmart, says it’s a further indictment of Walmart’s destructive business model.



The Court underlined the need to keep Walmart under close scrutiny by appointing an advisory board to oversee the administration of the fund. The board will include UNI affiliate SACCAWU, the government and the South Africa Small and Medium Enterprise Forum.



UNI Global Union General Secretary Philip Jennings said, “This is a victory in forcing Walmart to face up to its responsibilities. It’s also an acknowledgement that Walmart poses a serious risk to South African suppliers and cannot be trusted to administer the supply development fund on its own. However the decision does not go far enough. Joseph Stiglitz, who represented the South African government in compiling the expert report for the Court, had called for R500 million and up to R2 billion over ten years. That would have been a amount more in keeping with the size of the threat to South Africa suppliers, farmers and small businesses.”



Jennings added, “It’s clear there has been a sea change in attitude to Walmart around the world. In South Africa the Court decision is a vote of no confidence. In the backyard of Walmart, the United States, Walmart workers are finally rebelling and saying enough is enough after 50 years of worsening work conditions and wages which are not enough to support a family. They are striking in the US for the first time in Walmart history. This strike action is reverberating around the world including India where the individual states must decide whether to allow Walmart in and under what conditions. Many states have already come out and said no to Foreign Direct Investment which will be spearheaded by Walmart because they fear it will destroy the local economy."



Jennings concluded, “We have formed the UNI Walmart Global Union Alliance to stand up to a company which insists on putting profit before its own workers. Well now its workers in the US have had enough and they’re prepared to risk their jobs to fight for change. Don’t rule out South Africa Walmart workers and others across the globe protesting in solidarity. As they say in the US once the ketchup is out of the bottle you can’t put it back.”



Bones Skulu, the General Secretary of SACCAWU said, "SACCAWU will use its position on the Advisory Board of the Supplier Development Fund to monitor, critically assess and compel Walmart/Massmart to act in accordance with the Court ruling, given that Walmart to date is still unscrupulously resisting to fully comply with the earlier part of the Competition Appeal Court ruling around the reinstatement of the 503 Massmart workers who lost their jobs. The company has also intentionally, conveniently and selectively chosen to misinterpret the Court order on the issue of back pay. In South African labour law as elsewhere in the world, a reinstatement order unless it specifically states otherwise, always means with retrospective back pay and conditions no less favourable than those in existence prior to dismissal. Finally, the Court has recognised the risks the local economy faces because of Walmart. We will now challenge the company to observe the obligations handed down by the Court to give South African producers the opportunity to benefit rather than be hammered by Walmart."



The Competition Appeal Court decision



· The fund will create funding projects with the goal of minimising the risk posed to South African suppliers by the merger,

· The fund will protect existing and potential micro, small and medium producers of South African products who run the risk of being harmed by Wal-Mart's entry into South Africa.

· The fund should enable these producers to take advantage of Wal-Mart's global value-chain, and incentivise the retailer to purchase products from South African producers, over and above products that it would, in any event, purchase.

Background

Last year SACCAWU and three government bodies appealed the decision to allow Walmart to buy a R16 billion majority stake in South Africa’s Massmart retail chain. The union and the government departments argued that there were not enough conditions in place to protect local manufacturers and suppliers at risk from closure because of cheap Walmart imports.

The competition authorities decided that the Walmart/Massmart merger go ahead but recognised the need to protect local suppliers and jobs by imposing adequate and effective conditions. Namely that there should be no job cuts in the first two years, honour union collective bargaining agreements for three years and invest R100 million into a jobs fund to improve the competitiveness of the local industry.

In March of this year, the Competition Appeals Court ordered a three person panel representing the unions, the government and the company to come up with a study about how the fund should be used to protect and increase the capacity of the local supply chain. The panel has delivered two reports – the majority report from Stiglitz and Hodge representing the government and the unions and the minority report from Morris representing Walmart. Stiglitz and Hodge represented a fund of up to R2 billion.



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